Qatar’s budget surplus nears $3bn despite higher capex

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• Country surpasses 2023 forecast
• GDP grew 2.7% in Q1
• Oil price at $78 per barrel

Qatar reported a budget surplus of 10 billion riyals ($2.74 billion) in the second quarter of 2023, as oil prices remained higher than estimated, the finance ministry said.

The Gulf nation has surpassed its 2023 surplus forecast of 29 billion riyals for the year. The first quarter reported a fiscal surplus of 19.7 billion riyals, based on a budgeted oil price of $65 per barrel.

The average oil price stood at $77.7 per barrel, the ministry said.

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The surplus comes amid a rise in international companies considering a move to Qatar following a post-World Cup slump.

Experts believe the spike in interest is partly due to the UAE’s decision to introduce corporate tax as well as an update to Qatar’s Single Window system, which was launched in 2019 to help companies set up operations.

The number of queries has increased by 35 percent, according to Nazar Musa, CEO of PRO Partner Group for Qatar and Saudi Arabia, which helps international entities set up in the Gulf.

Qatar’s GDP grew by 2.7 percent year on year in the first quarter, as the hydrocarbon sector increased by 4.1 percent and the non-hydrocarbon sector expanded by 1.9 percent. The second quarter figures were not published in the statement.

Total revenue stood at 68.4 billion riyals, recording a slight decline of 0.3 percent year on year.

Oil and gas revenue reached 40.3 billion riyals, down 30.9 percent annually due to lower oil prices. The average oil price per barrel fell by 30.5 percent year on year, driven by concerns over possible global economic slowdown.

Non-oil revenue stood at 28.2 billion riyals, rising 2.2 percent year on year. A substantial portion of the budgeted non-oil revenue for the year was realised due to the timing of corporate income tax collection.

Total expenditure reached 58.4 billion riyals, recording an increase of 19.3 percent year on year.

Capital expenditure increased by 29.1 percent quarter on quarter on the completion of several infrastructure projects, the newly awarded projects, and payment to contractors.

The newly approved projects totalled 3.9 billion riyals in the second quarter of 2023.

Total public debt reached 343.6 billion riyals at the end of the second quarter, falling 3.5 percent quarter on quarter.

Qatar’s non-oil private sector continued to improve in July. Output, new orders, employment and purchasing all expanded.

The latest Purchasing Managers’ Index (PMI), published in early August, reached 54.0 in July, up from 53.8 in June. Any score above 50 signifies growth and expansion.